A type of exotic option
that provides a payoff
if the value
of the underlying reaches or does not reach a predetermined price
or "barrier level". Barrier options
are characterized as "knock in" if the right to exercise
the option is met, or "knock out" if the right is not met. It is characterized as "up" if the price of the underlying is above the barrier, and as "down" if it the price is below the barrier.